Stablecoins are now the dominant force in Brazil’s crypto economy, accounting for 90% of all digital asset transactions, according to Gabriel Galipolo, president of the Central Bank of Brazil.
Speaking at a Bank for International Settlements (BIS) event in Mexico City, Galipolo highlighted the rapid growth of stablecoin use in Brazil, emphasizing the regulatory and oversight challenges that come with their increasing role in everyday transactions.
“The surge in stablecoin adoption has raised concerns over issues such as taxation, financial stability, and money laundering risks,” Galipolo said, as reported by Reuters. He stressed that authorities must strike a balance between innovation and regulation to ensure the financial system’s integrity.
Brazil’s stablecoin dominance is part of a broader trend in Latin America, where digital assets are becoming an essential tool for remittances, inflation hedging, and everyday payments.
Regulatory Challenges in the Era of Brazil Stablecoin Dominance
The widespread use of stablecoins in Brazil has challenged regulators, forcing them to rethink how to oversee the rapidly evolving crypto landscape.
Unlike traditional cryptocurrencies such as Bitcoin, stablecoins are typically pegged to fiat currencies like the U.S. dollar, making them more suitable for transactions and remittances. However, their popularity has also raised compliance concerns, particularly regarding anti-money laundering (AML) and know-your-customer (KYC) regulations.
Regulators in Brazil are now debating whether new laws should be introduced to govern stablecoins separately from other cryptocurrencies. Roberto Campos Neto, Brazil’s central bank governor, previously suggested that stablecoins could be regulated similarly to electronic money providers, bringing them under the central bank’s existing financial framework.
Brazil’s Answer tpo the Stablecoin Surge
Amid the growing Brazil stablecoin dominance, the Central Bank of Brazil is developing Drex, a digital currency infrastructure aimed at improving the country’s financial ecosystem.
Contrary to speculation, Drex is not a Central Bank Digital Currency (CBDC), Galipolo clarified. Instead, it is a tokenized financial system designed to enhance credit accessibility through collateralized assets.
“Drex will function as an infrastructure project, using distributed ledger technology to facilitate wholesale interbank transactions,” Galipolo explained. He added that retail users will access Drex through tokenized bank deposits, ensuring it integrates seamlessly with Brazil’s existing financial system.
On October 14, 2024, the Central Bank of Brazil announced that Drex was being tested for integration with decentralized finance (DeFi) and asset tokenization. The project is expected to replace the country’s real-time gross settlement system, the Sistema de Transferência de Reservas (STR), making transactions faster, more transparent, and more secure.
Drex coordinator Fábio Araújo described the initiative as “STR 2.0,” but noted that additional technical refinements were needed before full deployment.
Why Stablecoins Are Thriving in Brazil
The rise of stablecoins in Brazil can be attributed to several factors:
Economic Volatility – With inflation concerns persisting, many Brazilians see stablecoins as a safe haven compared to the Brazilian real.
Cross-Border Transactions – Stablecoins reduce remittance fees, making them an attractive option for sending money internationally.
E-commerce Growth – The rise of crypto-friendly merchants in Brazil has fueled stablecoin adoption for online payments.
Institutional Interest – Companies like Mercado Libre have launched their own dollar-pegged stablecoins, increasing market accessibility.
In August 2024, Mercado Libre introduced the Meli Dollar, a stablecoin designed to streamline e-commerce transactions and hedge against local currency fluctuations.
Stablecoins Overtake Bitcoin in Brazil’s Crypto Market
Brazil’s growing reliance on stablecoins marks a major shift in the country’s crypto landscape. According to a Chainalysis report, between July 2023 and June 2024, Brazilian crypto users deposited approximately $90 billion in digital assets.
However, stablecoin volume during this period only accounted for 59.8% of transactions. The latest data from the Central Bank of Brazil now shows that stablecoins dominate 90% of crypto transactions, signaling a massive shift in user preference toward low-volatility assets.
“Brazil is now a leading hub for stablecoin transactions, surpassing many global markets in adoption rates,” said Kim Grauer, Head of Research at Chainalysis. “This trend underscores how stablecoins have evolved beyond trading tools and are now being used for real-world payments.”
Global Stablecoin Adoption Surges in 2024
Brazil’s stablecoin dominance reflects a global trend. According to a January 31, 2025, report by CEX.io, stablecoins outpaced major traditional financial networks in transaction volumes last year.
The report revealed that annual stablecoin transfer volume reached $27.6 trillion in 2024, surpassing the combined volumes of Visa and Mastercard.
As stablecoins continue to disrupt traditional finance, regulators worldwide are working to establish clearer guidelines to ensure financial stability while allowing innovation to flourish.
The Future of Stablecoins in Brazil
With stablecoins now accounting for 90% of crypto use in Brazil, the country is at a regulatory crossroads. Policymakers must decide how to incorporate stablecoins into the broader financial system while mitigating risks related to fraud, taxation, and financial stability.
Meanwhile, projects like Drex could provide a state-backed alternative, leveraging blockchain technology while maintaining regulatory oversight.
“Stablecoins are here to stay,” said Diego Gutierrez, CEO of IOV Labs. “The challenge is ensuring they operate within a secure and regulated environment that benefits both businesses and consumers.”
As Brazil stablecoin dominance continues to reshape the country’s digital economy, the coming months will be critical in determining how regulators and financial institutions adapt to this new financial reality.
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